The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) published guidance related to the Ministerial Directive on Financial Transactions Associated with Russia issued on February 24, 2024.
The Directive issued by the Department of finance was published in the Canada Gazette and came into force on February 24, 2024. This document tightens controls on financial transactions associated with Russia.
According to the FINTRAC guidance, every person or entity referred to in section 5 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act must:
• treat every financial transaction originating from or bound for Russia, regardless of its amount, as a high-risk transaction for the purposes of subsection 9.6(3) of the Act
• verify the identity of any client (person or entity) requesting or benefiting from such a transaction in accordance with Part 3 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations
• exercise customer due diligence in relation to any such transaction, including ascertaining the source of funds or virtual currency, the purpose of the transaction and the beneficial ownership or control of any entity requesting or benefiting from the transaction
• keep and retain a record of any such transaction, in accordance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, regardless of the monetary thresholds set out in those Regulations.
This Ministerial Directive does not apply to transactions where there is no suspicion or explicit connection with Russia and there is no evidence of the transaction originating from or being bound for Russia. For example:
• a client who has previously sent funds to Russia requests an outgoing electronic funds transfer, where the transaction details do not suggest that this transaction is bound for Russia and you are unable to obtain further details about the transaction destination
• the client’s identification information is the only suggestion of a connection to Russia (for example, a transaction where the conductor’s identification document is a Russian passport); or
• the details of a person, who is your client in Canada, are Russian, but there are no additional details on the entity involved, or the sender of, or the recipient to, the transaction, to suggest the transaction is associated with Russia
